Sens. Lindsey Graham and Jim DeMint, both S.C. Republicans, are leading opposite sides of a fight within their party over a federal export-assistance program expected to reach the Senate floor Tuesday.
The two senators' differences over reauthorizing the Export-Import Bank of the United States reflect a broader divide between business-friendly Republicans who want the government to help U.S. firms compete with foreign companies and those who oppose federal subsidies of free enterprise.
Graham and Sen. Richard Shelby of Alabama, the senior Republican on the Senate Banking Committee, are among the GOP senators backing legislation by Sen. Maria Cantwell, a Washington Democrat, to extend the bank's charter to 2015 and hike its lending limit to $140 billion.
The Export-Import Bank, an independent federal agency, provides bridge loans and credit guarantees to finance the overseas sale of American products. Its biggest beneficiaries include some of the nation's largest firms, among them Boeing, Caterpillar, General Electric and Bechtel.
“I would love to see a world where there was a completely level playing field and we didn't have any kind of subsidies, but we live in a world where the amount of financing available to competitors of American companies is growing,” Graham told reporters Monday.
“If we unilaterally surrender and kill this program, American manufacturers who are trying to export American-made products are just going to get decimated,” he said.
The U.S. Chamber of Commerce, the National Association of Manufacturers and other powerful business lobbying groups are pushing lawmakers to reauthorize the Export-Import Bank.
DeMint, who spent millions helping get tea party-backed Republicans elected to the Senate in 2010, said U.S. companies can compete on their own if the corporate tax rate is lowered and President Obama's health insurance law is repealed.
“America didn't become the world's strongest economy by trying to out-socialize Europe with financial policy, and we won't win the future by picking winners and losers with taxpayer dollars,” DeMint told McClatchy.
DeMint asked other senators to oppose reauthorization of the Export-Import Bank in a letter also signed by GOP Sens. Saxby Chambliss of Georgia, Charles Grassley of Iowa, Tom Coburn of Oklahoma and two freshmen who received large campaign contributions from DeMint's Senate Conservatives Fund – Sens. Rand Paul of Kentucky and Mike Lee of Utah.
In a power move aimed at driving a wedge between Republicans, Senate Majority Leader Harry Reid, a Nevada Democrat, indicated he would attach Cantwell's measure to a popular separate bill reducing red tape for American startup companies and would hold a vote on it Tuesday as an amendment.
“The Export-Import Bank is one of the most important tools America has to create jobs,” Cantwell said in a statement. “Allowing (it) to expire would be a crippling blow to our export economy.”
Boeing, whose foreign airline customers have received more than half of all loans from the bank since 2007, has its largest manufacturing plants in Washington state.
The aerospace giant last year opened a factory in North Charleston, where it is making the next-generation 787 Dreamliner planes, many of them on back order with foreign airlines.
In a letter to Graham last week, Boeing CEO James McNerney Jr. said eight of 10 aircraft made in South Carolina would be bought by overseas firms with the help of export credits from the Export-Import Bank.
“Without this support, many of our customers will choose to purchase airplanes from Airbus, made in Europe, built by European labor, sold with the aggressive backing of multiple European export credit agencies,” McNerney said.
McNerney heads Obama's export advisory panel, and the president toured a Boeing factory in Everett, Wash., last month as he pushed his plans to boost U.S. foreign sales.